Plausibly Exogenous [993] - Disloyal Managers (10/19/2022)
LHS Variable
Investment in innovation
RHS Variable
Weakening of fiduciary duty
Source of Exogenous Variation
Staggered passage of waiver laws starting in 2000 where several states, including Delaware, allowed boards to waive the duty of loyalty (prohibition against fiduciaries appropriating business opportunities from their companies)
- Fich, Harford, and Tran (2021), “Disloyal Managers and Shareholders’ Wealth”